Opinion

Is childcare unnecessarily expensive in Canberra?

There is no denying that childcare is expensive in the ACT. A report released by the Productivity Commission last year found that Canberra parents pay some of the highest fees in the country. A quick look at the website www.mychild.gov.au this week reveals that parents are paying anywhere between $90 and $127 a day for long day care in the ACT. When this year’s report comes out in a few weeks, there will be no surprise if the ACT continues to be home to some of the highest childcare fees in Australia. While the Australian Government provides substantial subsidies around these costs, it is still a hefty hit to weekly family budgets.

Some Federal politicians have recently weighed into the debate, suggesting that it is the Government’s fault that the costs are so high, pointing to unnecessary regulation for a job that they see is primarily around ‘wiping noses’. They suggested that parents should have the choice to access childcare that is not subject to the Federal regulations or quality regulations.

Would you send your child to a centre that was cheaper because it was not required to meet the National Quality Framework guidelines?

Yes, childcare is too expensive and there is no need for carers to have qualifications beyond basic first aid and a Working with vulnerable people clearance.

No, I value the expertise of the carers who operate within the National Quality Framework and don't mind paying extra.

It is true that childcare costs have been rising in recent years primarily due to the introduction the National Quality Framework. This framework introduced a few years ago is aiming to increase the quality of the care provided to our children. It insists that childcare workers either hold or are working towards a qualification, it imposes strict requirements on the delivery of age appropriate curriculum and ensures that facilities, food and equipment meet certain standards.

Its tempting to think that it’s just government redtape that is creating these high costs. However, what often gets lost in the discussion is what we are asking of our childcare workers. We are sharing the care, nurturing and education of our babies, toddlers and pre-schoolers with them. The evidence is overwhelming regarding the importance of the early years in terms of learning and development – there isn’t any time in our lives where we learn more, and creating environments that are safe, nurturing and educational is key to setting people up to be the best people they can possibly be. For many families, formal childcare is not a choice – its a necessity and the only way that we can operate in the modern world. For many children, formal childcare is a complement to what families can provide at home, and is important to their early development and care.

I have been a parent of childcare services as well as running a number of childcare services in Canberra. It’s hard work and the only ways it’s possible is because of the workers who have chosen this as their profession. They don’t do it for the money – the average childcare worker gets a similar pay rate to retail workers. It’s work that is physically and emotionally demanding. I have constantly been amazed by the professionalism, care, and love that workers have shown the children in their care. While working to ensure that services remain affordable is important, I also think it’s important to include in the discussion a recognition of the amazing work that our local childcare workers do and work to see how we can better value this.

Read the response of one childcare worker to calls for a relaxing of the regulation in the sector:

What do you think? Do you think that there should be a choice to have childcare that is not bound by the national regulations?

Just wondering, how much of an effect did the collapse of ABC Learning have on the industry overall re: pricing and availability etc… and is that still having a knock-on effect to this day?

It’s interesting re: the argument for government vs private run though. Some things private enterprise can seem to deliver better than Governments, some things I wonder if we would be better off with all government run and no private involvement though, things that come to mind are public schools, prisons, and yes childcare facilities among other things. ABC Learning showed how an out of control profit driven enterprise can create a market bubble and then collapse, in hindsight was allowing this company to get so much taxpayer funding a good thing or a bad thing in the long run?

Early childhood education significantly improves outcomes for those of lower socioeconomic status. For the higher socio-economic groupings there is limited value as they already get the educational benefits at home.

How exactly can lower socio-economic groups afford childcare though? I gather from your statement that you think poor people can’t educate their kids properly and rich people can. On what basis? Financial status is no measure of intellectual ability, I’m sure there are many smart poor people. That being said, I reckon there is a great many dumb rich people too.
Are not higher socio-economic groups about the only ones who can afford early intervention? I would imagine that richer families have both parents working, so the child wouldn’t benefit at all from being schooled at home because there will be no parent there to teach them.

It’s more about the resources available – children in higher socio-economic households tend to grow up with books and educational toys around them. It’s not that parents can’t teach it’s that they lack the resources that are common in higher socio-economic families and find it harder to assist their children.

Prices have increased year on year by around 7% pa even prior to the regulatory changes under the NQF in 2012. This is not to say that the NQF hasn’t contributed to increases in prices but there are other factors at play in the market such as increased costs of rent, supply and labour market factors.

True, as with any business, there are multiple factors that translate into pricing. One is Rent – a component of which must take into account Annual Rates charged by the ACT Govt.

Does the ACT Gov’t provide a concession or discount charged for Annual Rates on premises used for early childhood education / childcare ?

If so, great. What is that concession/discount ?? If not, why not ??

Assuming of course that any such concession/discount would be passed onto users and so probably marginally assist with the cost.

If the premises are used solely for producing assessable income then 100% of the rates/land tax could be claimed as a tax deduction.
I doubt if the government would be giving any concessions to any businesses, rather they have to pay extra like land tax, garbage collection etc.
As I understand it, anyone who runs a childcare business from their home has to to have regulatory approval from the government. There was a time when any business run from a home had to have government approval.

Accordingly, they should be paying land tax, higher electricity etc, for the privilege.
The ACT Government is a party to data matching with other agencies already so beware.

Prices have increased year on year by around 7% pa even prior to the regulatory changes under the NQF in 2012. This is not to say that the NQF hasn’t contributed to increases in prices but there are other factors at play in the market such as increased costs of rent, supply and labour market factors.

True, as with any business, there are multiple factors that translate into pricing. One is Rent – a component of which must take into account Annual Rates charged by the ACT Govt.

Does the ACT Gov’t provide a concession or discount charged for Annual Rates on premises used for early childhood education / childcare ?

If so, great. What is that concession/discount ?? If not, why not ??

Assuming of course that any such concession/discount would be passed onto users and so probably marginally assist with the cost.

The ACT Government has provided subsidisation for many for non-profit child care services through peppercorn rent and other rental arrangements. But the Commonwealth is the major player in this space providing subsidies for child care fees.

Decreasing rental is not necessarily going to have any impact on child care prices without reform of the broader system.

My Federal colleague The Hon. Kate Ellis MP has argued for radical reforms to child care are needed. She argues rightly that in our fee and subsidy system, the Government doesn’t actually have control over the levers that can deliver for children and parents.
That’s despite Government contributing about two thirds of the total cost.

Prices have increased year on year by around 7% pa even prior to the regulatory changes under the NQF in 2012. This is not to say that the NQF hasn’t contributed to increases in prices but there are other factors at play in the market such as increased costs of rent, supply and labour market factors.

True, as with any business, there are multiple factors that translate into pricing. One is Rent – a component of which must take into account Annual Rates charged by the ACT Govt.

Does the ACT Gov’t provide a concession or discount charged for Annual Rates on premises used for early childhood education / childcare ? If so, great. What is that concession/discount ?? If not, why not ?? Assuming of course that any such concession/discount would be passed onto users and so probably marginally assist with the cost.

In the past child care was not necessary to a larger extent, because families were able to live on one income. With the high cost of living, lack of wages growth and increasingly casual nature of employment, families are needing to have both parents work to make ends meet. What do they do with the children whilst this is happening? If grandparents aren’t available to baby sit, thanks again for the need to keep working well into our late sixties and seventies, what do parents do? Childcare has become an industry to make money for the owners and their shareholders. The exorbitant costs make people think twice about using childcare, which can end up being more expensive than the income earned by the other parent.
As for the early childhood education aspect, sure the carers need to be able to take on the role of the parent, but having to gain special qualifications for it is over the top. What about parents who look after their own children until pre-school? Do they have to do a university course in order to properly raise their own kids? No. So why is the burden placed on childcare workers, whose role should really be to look after the children’s welfare and safety, to provide a fun, recreational environment where learning will be achieved by the child through their own explorations and discoveries. I’m sure there are some toddlers out there whose home style education is simply to be placed in front of a television or given an Ipad.
To think a child who has been deprived of early learning through either a lack of suitably qualified personnel or by being raised at home, is somehow held back mentally, is simply ludicrous. Our youngest never had the opportunity of a formal early learning program but is easily three years ahead of his classmates in some subjects. Kids who spend their first three years of life being raised by strangers do not necessarily get any better start in life than if they were instructed by a stay at home parent.

pink little birdie said :

Early childhood education significantly improves outcomes for those of lower socioeconomic status. For the higher socio-economic groupings there is limited value as they already get the educational benefits at home.

How exactly can lower socio-economic groups afford childcare though? I gather from your statement that you think poor people can’t educate their kids properly and rich people can. On what basis? Financial status is no measure of intellectual ability, I’m sure there are many smart poor people. That being said, I reckon there is a great many dumb rich people too.
Are not higher socio-economic groups about the only ones who can afford early intervention? I would imagine that richer families have both parents working, so the child wouldn’t benefit at all from being schooled at home because there will be no parent there to teach them.

I remember talking to a childcare worker a couple of years ago and they said that early childhood education was so important because the kids who didn’t get it took 3 years to catch up in school. What I took from that was that they did catch up, and so therefore the education component of childcare, which is where a lot of the extra cost seems to be coming from, was not necessary and government regulation is imposing extra unnecessary costs on parents.

I don’t know if my interpretation of what they said was correct or not and I’ll admit its something I haven’t investigated. Seeing this article I thought it might be a good chance to pose the question as to whether early childhood education results in significant identifiable differences between kids when they finish their schooling, after taking into account differing socio economic circumstances.

If the answer is yes, then my position is that childcare should be part of the education system and be available to all kids regardless of parental incomes. If the answer is no then government should relax some of the regulations so as to allow lower cost providers to provide services to parents who couldn’t otherwise afford childcare.

The answer is yes.

It’s much harder for children to catchup with their peers if they start from behind.

The years before full-time schooling the duration children attend early learning (in years) is related to better intellectual outcomes (Sylva et al., 2004, p. 1).

The Australian Institute for Health and Welfare found that all children benefit from attending an early learning program from age three, if it is a quality program (AIHW, 2015, p. 25).

The Effective Pre-School, Primary & Secondary Education (EPPSE) study looked at the school results of children at age 3-16+, finding that the positive associations of early learning from age three lasted well into high school (up until Age 18). Importantly, children who attended a quality early learning program for 2-3 years before school had much better results on average. And it shows that early childhood education is at least as decisive in shaping student’s numeracy results at the end of high school – as the whole of Primary School.

And analysis by PISA shows that PISA research also shows that the relationship between early learning and performance ‘tends to be stronger in school systems with longer duration pre-primary education, smaller child-to-teacher ratios in pre-primary education and higher public expenditure per child at the pre-primary level’.

Prices have increased year on year by around 7% pa even prior to the regulatory changes under the NQF in 2012. This is not to say that the NQF hasn’t contributed to increases in prices but there are other factors at play in the market such as increased costs of rent, supply and labour market factors.

Yesterday’s article by Dr Ben Phillips including the graph of child care CPI (Australia wide) provides some further info:

I remember talking to a childcare worker a couple of years ago and they said that early childhood education was so important because the kids who didn’t get it took 3 years to catch up in school. What I took from that was that they did catch up, and so therefore the education component of childcare, which is where a lot of the extra cost seems to be coming from, was not necessary and government regulation is imposing extra unnecessary costs on parents.

I don’t know if my interpretation of what they said was correct or not and I’ll admit its something I haven’t investigated. Seeing this article I thought it might be a good chance to pose the question as to whether early childhood education results in significant identifiable differences between kids when they finish their schooling, after taking into account differing socio economic circumstances.

If the answer is yes, then my position is that childcare should be part of the education system and be available to all kids regardless of parental incomes. If the answer is no then government should relax some of the regulations so as to allow lower cost providers to provide services to parents who couldn’t otherwise afford childcare.

complicated.. Early childhood education significantly improves outcomes for those of lower socioeconomic status. For the higher socio-economic groupings there is limited value as they already get the educational benefits at home.

It’s pretty much confirmed though the benefits of early childhood education are greater than the costs for lower socio economic children. It translates into the children finishing school to year 12, more likely to be engaged in education or work after compulsory schooling, less interaction with police and the justice system. Intervention at the early stage is also hugely cheaper with the same results costing $14 during the teen years as opposed to $1 during under $5 age group.

I do agree that it should be rolled into the primary education system.

I remember talking to a childcare worker a couple of years ago and they said that early childhood education was so important because the kids who didn’t get it took 3 years to catch up in school. What I took from that was that they did catch up, and so therefore the education component of childcare, which is where a lot of the extra cost seems to be coming from, was not necessary and government regulation is imposing extra unnecessary costs on parents.

I don’t know if my interpretation of what they said was correct or not and I’ll admit its something I haven’t investigated. Seeing this article I thought it might be a good chance to pose the question as to whether early childhood education results in significant identifiable differences between kids when they finish their schooling, after taking into account differing socio economic circumstances.

If the answer is yes, then my position is that childcare should be part of the education system and be available to all kids regardless of parental incomes. If the answer is no then government should relax some of the regulations so as to allow lower cost providers to provide services to parents who couldn’t otherwise afford childcare.

Schools in NSW used to integrate a form of childcare education in their primary schools – I think it was called Kindergarten.
I vaguely remember going to it in a NSW country town in the 1950s when I was about 3 years old.
You can see from my superior intellect that it served me well.

I remember talking to a childcare worker a couple of years ago and they said that early childhood education was so important because the kids who didn’t get it took 3 years to catch up in school. What I took from that was that they did catch up, and so therefore the education component of childcare, which is where a lot of the extra cost seems to be coming from, was not necessary and government regulation is imposing extra unnecessary costs on parents.

I don’t know if my interpretation of what they said was correct or not and I’ll admit its something I haven’t investigated. Seeing this article I thought it might be a good chance to pose the question as to whether early childhood education results in significant identifiable differences between kids when they finish their schooling, after taking into account differing socio economic circumstances.

If the answer is yes, then my position is that childcare should be part of the education system and be available to all kids regardless of parental incomes. If the answer is no then government should relax some of the regulations so as to allow lower cost providers to provide services to parents who couldn’t otherwise afford childcare.